WHY HELPING LOWER INCOME PEOPLE HELPS REVIVE THE ECONOMY

Center for Budget and Policy Priorities - One of the best ways to boost demand and hence employment is to target financial relief on low- and moderate-income individuals and unemployed workers who need a replacement for lost income. People whose income is disrupted in a recession and who lack the savings to tide them over and maintain their normal consumption, and people whose incomes are so low to start with that they have difficulty making ends meet, are the people most likely to spend quickly any added income they receive.

Understandably, lawmakers think of policies like a temporary increase in food stamp or unemployment benefits first and foremost as policies that relieve distress for the individuals receiving them and for their families. But these are also policies that score highest in "bang-for-the-buck" calculations of their economic impact as stimulus. The money gets spent fast, and its effects then spread through the economy. As a result of such policies, local retailers are less apt to lay off workers and cut back on orders from their suppliers during a downturn; and in the early stages of a recovery, they are more apt to hire additional workers and step up their orders from suppliers.

Helping struggling families isn't an alternative to preserving and creating jobs; it's one of the most effective ways to preserve and create jobs and should be a prime focus of any job-creation package. . .